Digital Media - Business Models


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Introducing some terms and models around the Internet/ www for the MA Design for Digital Media, as part of the Professional Practice unit.

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  • bubble:(1995-2000, goldrush era of www, start-up companies – venture capitalists, operating at loss, creating market share, lack of sustainable business models and super-inflation of stock market shares) – survivors: ebay, amazon, googlePaying a website, according to their traffic, for placing a banner advertising your site/product – being able to target audience and track success. Also: Google AdWords, most successful model of this typeChris Anderson: Serving Niche markets – no need to store large amount of specialised products, saving overheads, serving enthusiastic interested consumers willing to pay, global audienceOpen Source – creativity and innovation through sharing outcomes, methods and processes (releasing code etc)Web 2.0 – ca. 2003, new generation of www technologies, allowing more active user participation (rich media, dynamic sites rather than static, and users contributing content, feedback – ‘metadata’ etc) – social networking, blog, wikis, video sharing sites, web applications. EtcProdusage: new model of ‘production’ (see next slide)Creative CommonsFree(-mium)
  • Consumers are not audience, they contribute and make sense of and share… Social, open participation, communal evaluation, knowledge about knowledge – METADATA / tagging - wikipedia, social bookmarking (delicious, reddit, digg): folksonomyCitizen JournalismGoogle ranking – Linkage / QualityAmazon – RecommendationsCurrent. Tv
  • Peer-to-peer sharing, illegal downloads, DRM - traditional industries crumbling – Journalism, Film, MusicEmbracing new models of sharing / buying: Itunes (convenient & legal – successful)Also DGMLive- serving the Music Enthusiast directly, circumventing Music industry involvement
  • Free (2009): Supplying some content in some form for free -> increase awareness and audience, convert to paying customers; subscription model of mediaFree Book: Hardcopy - not freeAudiobook unabridged – FREEAudiobook abridged - not free (TIME IS MONEY)Radiohead - experimenting with different ways of giving for free & generating income (Boxsets, Tour)
  • February 2011:Newly introduced by Apple: “if a subscription service like Zinio, Spotify or The Telegraph sells an iPad subscription on its own website, it must also provide that same offer through an in-app purchase “ ( – people will be more likely to purchase through Apple store, meaning 30% of the fee will go to Apple. (On the other hand, more people may be buying as the process is more convenient. )Now surpassed by Google’s One Pass ( , offering a 90/10 split share of the profits, as opposed to the 70/30 split by Apple
  • Digital Media - Business Models

    1. 1. Digital Media<br />Business Models &<br />Funding<br />
    2. 2. Bubble<br />Banner Advertising<br />Long Tail<br />Open Source/Shareware<br />Web 2.0<br />Produsage<br />Creative Commons<br />Free(-mium)<br />
    3. 3. Produsage<br />“…the production of ideas takes place in a collaborative, participatory environment which breaks down the boundaries between producers and consumers and instead enables all participants to be users as well as producers of information and knowledge…. <br />Participants are Produsers”<br /> (Axel Bruns, Produsage: Towards a Broader Framework for User-Led Content Creation)<br />
    4. 4. Creative Commons <br />New models of producing, distributing, consuming – requires new ways of thinking about intellectual property and copyright<br /><br />
    5. 5. Free(-mium)<br />Chris Anderson – ‘Free’ (2009)<br />“The Web is all about scale, finding ways to attract the most users for centralized resources, spreading those costs over larger and larger audiences as the technology gets more and more capable”<br /><br />
    6. 6. Apps Distribution<br />Apple: App Store<br />Google: Android Market<br />Nokia: OviStore<br />Research in Motion: Blackberry’s App World<br />(Amazon: Appstore/3rd parties)<br />App Revenue vs In App advertising<br />Subscription billing services.. Apple/Google<br />